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Celebrating Medicare and Medicaid’s 47th birthday this week, here are some quick thoughts on government’s role in ensuring access to affordable health care:

The United States spends nearly double what other countries spend. Americans spent a total of around $7,600 per person on health care in 2010, compared with around $3,900 on average for countries with similar standards of living, according to the Kaiser Family Foundation. Despite this higher spending, health outcomes are no better than in other developed countries.

High and rising health care costs are the biggest fiscal challenge our country faces. The Congressional Budget Office (CBO) projects that federal spending on major health programs will increase from 7.4 percent of GDP in 2022 to 10.4 percent in 2037 if current policies remain in place. Nearly two-thirds of this increase is due to the assumption that per capita health care expenditures will grow faster than per capita GDP. In the absence of this excess cost inflation, spending on these programs would increase to a more manageable 8.6 percent of GDP in 2037, largely reflecting the long-anticipated baby boomer retirement.

Shifting responsibility to individuals would increase overall costs. The House budget resolutions developed by Budget Committee Chairman Paul Ryan (R-Wis.) would shift costs to vulnerable seniors while weakening Medicare’s ability to control these costs. According to the Center for Economic and Policy Research, Ryan’s fiscal year 2012 budget resolution would increase economy-wide health care spending by as much as $34 trillion over 75 years—six times the size of the projected Social Security shortfall—if seniors purchased Medicare-equivalent plans. More likely, national health costs would skyrocket and seniors would receive less adequate insurance and care.

We need a public option. Where ACA is weakest is cost containment, though part of the problem is that the bean counters at CBO are dismissive of provisions of the law designed to restrain costs in the future, creating a bias in favor of plans like the Ryan plan that focus on cutting and capping benefits rather than slowing costs (see p. 8 and p. 57 of CBO’s Long-Term Budget Outlook for a description of how CBO’s “Alternative Fiscal Scenario” assumes away cost containment). The best way to reduce costs would be a Canadian-style single-payer system. If this isn’t politically feasible, let’s at least have a public option modeled on Medicare, as EPI board member Jacob Hacker proposed back in 2007. Then we’ll have to watch carefully to make sure the government plan competes on a level playing field with private plans.

Programs for the poor become poor programs. Medicare is a better insurance model than Medicaid, which is a life saver, but in most states is grossly inadequate for protecting even very poor people, as Jeff Madrick explains in a New York Review blog post. In the typical state, a working parent loses eligibility for Medicaid when his or her income reaches only 63 percent of the poverty line, and an unemployed parent must have income below 37 percent of the poverty line to qualify for the program, according to the Center on Budget and Policy Priorities. Meanwhile, poor working-age adults without dependent children are completely out of luck in most states. The ACA was intended to rectify Medicaid’s state-level deficiencies as an anti-poverty program, but as Timothy Noah points out in The New Republic, the Supreme Court’s ruling undermined the Medicaid expansion, thus strengthening the case for federalizing the program to ensure adequacy

It’s not a zero-sum game. In a sensible world, what matters is the total amount and ultimate distribution of health costs, not the federal government’s share. But as Eric Laursen describes in his new book on the struggle to defend Social Security since Reagan, elite opinion frames the issue of social insurance in such a way that benefits going to any one group (usually seniors, or in Bill Keller’s version, baby boomers) appear to come at the expense of another group (usually young people). This allows people like Rep. Ryan and Fiscal Commission co-chairs Alan Simpson and Erskine Bowles to promote plans that hurt the young people they purport to help while ignoring the real problem—that it’s hard to compete globally and raise living standards when you’re spending twice as much as you need to on health care. Sadly, our ability to pursue expansionary fiscal policies and address other national priorities appears hamstrung by projections showing federal spending going through the roof—and revenues held hostage at low levels—whether these projections are realistic or not.

Being one of the Canadian relatives of the author, I would like to add this :
– I was shocked to see that often, people who had the most to gain from a real reform were the most fierce opponents. That says a lot about the desinformation campaign that took place
– We have absolute freedom concerning the physicians we wish to consult with
– The administrative cost for our public health program is way lower than in the U.S.
– The actual problems with our system has much to do with corporatism and the way things are organized and really not much with money. Experts in health systems administration know what should be done, but, until now, no politician has had the guts to confront the many medical lobbies and the inherent inertia of any big organization. Nonetheless, we are moving, albeit very slowly, toward a more efficacious system that can also afford to be humane !!